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What is a Leased Line?

Susan Anderson
Susan Anderson

A leased line, a type of dedicated line, is a permanent fiber optic or telephone line connection between two points set up by a telecommunications carrier. It can be used for telephone, data, or Internet services. Often, businesses will use a leased line to connect geographically distant offices because it guarantees bandwidth for network traffic. For example, a bank may use a leased line in order to easily transfer financial information from one branch office to another.

Both long and short distances can be spanned by a leased line, and customers generally pay a flat monthly rate for the service. Before broadband Internet access was readily available, a company's cost was charged according to the distance between the two points. More recently, leased line replacement services allow a user to upgrade and improve the lines with fees that are per-end only.

Man holding computer
Man holding computer

Leased lines do not have telephone numbers because each side of the line is always connected to the other. In contrast, telephone lines reuse the same lines for numerous conversations through a process called switching. The information sent through a leased line travels along dedicated secure channels, eliminating the congestion that occurs in shared networks.

Connection speeds can range from 64 kilobits per second (Kbps) to 10 gigabits per second (Gbps). The bandwidth is dictated by the amount of data used, the number of users accessing the line, and the amount of applications running at any given time. Some users incorporate a digital data service (DDS) that allows a company to transfer a large quantity of data at higher speeds with lower error rates than a typical leased line. A DDS is a unique type of leased line that uses digital techniques and a wider bandwidth.

Some individuals also use leased lines in order to obtain a faster, more reliable Internet connection. A typical leased line fee includes a pre-configured router, static IP addresses, POP3 email accounts, domain name hosting, 24-hour network monitoring and fault detection, and technical assistance. Installation is the same as ordinary telephone lines, and it can be practical if an individual spends a large amount of time on the Internet. While most leased lines are relatively expensive, there are lines called fractional T1 lines with lower connection speeds and prices.

Leased lines predate the Internet and were utilized in 1950s by Project RAND when researchers collaborated across the country from Pennsylvania to California. These researchers used the computer networking process called the central mainframe method, where terminals were connected with long leased lines. This permitted fast, secure communication between the researchers on the network.

There are many benefits leased lines have over other telephone and Internet connections. They typically offer faster download and upload speeds, and better security and privacy, as the lines are dedicated to the company. In most cases, a wide choice of reliable and resilient bandwidths are available, bandwidth is typically guaranteed and upgradeable for business usage, and they are suitable for web hosting.

Discussion Comments


New leased line replacement services are charged per end, with no cost for distance between sites.


What is Digital data Service (DDS)?

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